How to Bank Triple-Digit Profits with the Hottest Stocks in the S&P 500

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The S&P has been hovering around all-time high territory for the last few weeks, which means that lucrative trading opportunities are everywhere you turn.

But that doesn’t mean you should just jump into the next trade you see.

The key is to identify the best of the best in this bullish market – and that’s where you put your money.

But that’s much easier said than done…

So today, I’m going to let you in on the market’s best-kept secret – and show you exactly how to pinpoint your next big profit opportunity.

These S&P 500 “High Fliers” Could Hand You Your Next Triple-Digit Win

Newton’s first physical law says: “An object in motion tends to stay in motion.”

The trading world would say it this way: “The trend is your friend.”

But here’s the thing – that’s not always the case. Like, for instance, when the motion or trend stops.

It can be tricky to determine when the end will be, which is why the best course is to use discrete technical conditions (e.g., moving averages, support/resistant, volume, etc.) that can help signal the end.

These laws also apply when stocks set an annual or multi-year high.

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Now, you’ve probably heard that entering a trade at an annual or multi-year high isn’t the best – but truth be told, it is often the ideal time to jump in.

Why?

Here’s the thing: institutions account for the bulk of trading activity. Stocks will go where they take them through varying levels of buying and selling enthusiasm. Institutions also use program trading with discrete price targets to accumulate and distribute stocks. It makes sense that if a stock reaches an annual or multi-year high, their intentions are to take it even higher.

This is why I love trading what many call the “high fliers.”

To pinpoint these, I use a scanner to alert me when stocks reach annual or multi-year highs. Below is a recent list of the S&P 500 stocks that have reached an annual high:

Now, this list shows only 20 stocks, but there are a lot more with the S&P 500 reaching all-time highs recently.

You can see that the list shows the annual “High Price” and “Low Price,” as well as the close price and where it lies in the annual range. All of these are at 100%, indicating that they just set an annual high. The first seven are at ALL-TIME HIGHS!

On top of this, you can increase the probability of continuing upside movement with basic technical analyses like support/resistance breaks, trend lines, and moving averages (MAs).

Talk a look at the CME Group Inc. (Nasdaq: CME) chart below:

Here’s what’s technically appealing in addition to CME being at an all-time high:

  1. Stock > 50-day MA > 200-day MA.
  2. 200-day MA is in an uptrend.
  3. 50-day MA is starting to curl up.
  4. Nice consolidation prior to recent up-trend (sellers got shaken off).
  5. Tight upward trend channel.

Even if CME hadn’t just hit an all-time high, all of the above technical indicators would suggest that there’s more upside from here. Couple these indicators with an all-time high, and you have a winning combination.

But here’s the thing to remember: When dealing with all-time high stocks, it’s common for the share price to be well in excess of $100. Cheap stocks are cheap for a reason, and great stocks can be expensive for a reason.

In this case, when institutions accumulate stock, the price can get expensive.

If you’re an option trader like me, the easy remedy is to buy call options and pay approximately 10% to 20% of the actual stock price.

I would recommend buying 60- to 90-day options that are one or two strikes out-of-the-money (OTM).

On CME, I can currently buy December $180 call options for $3.80 a share. That’s quite a discount when compared to $174.73 a share to hold the stock. Additionally, the ROI on the calls will be substantially higher if the stock continues on this bullish trend. And that means you pocket some major profits.

Just be sure to talk to your financial advisor to decide what the best option is for you.

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The post These “High Fliers” Can Hand You Your Next Triple-Digit Profit appeared first on Power Profit Trades.

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